Berni's View

Donnerstag, 1. Dezember 2011

"Concertazione" was for many decades at the very hardt of Italy's political process. It worked in the way that the government never took any decision regarding taxation, welfare etc. without having installed "round tables" with the organized interest groups, like the trade unions or the industrialist federation Confindustria. That was the place, were the outcome of the measurements was negotiated.
Be sure: this method had many negative effects and only few positives. At the price of a (quite doubtful) social peace real reforms were not done. The few ones, that were done, were terribly diluted. And it has always slowed down the process of political decision making. It was very expensive, having led Italy to a total public debt of currently 120% of GDP, before Geeece the worst in Europe. Last but not least it has helped to swell up the lobbies, overall in terms of power.
This bad habit will be the main issue for the new Italian government under Prime Minister Mario Monti. Today the trade unions have started to criticise Monti's envisaged pension reform. He should at least listen to us, they argue, but they mean, he should dilute the plans and he should take more time. In this phase, in which the new government has to build up his credibility in front of the international communities, the markets but also the Italians, this "recommendations" are lethal. Monti should notlisten to it. He has to do the deep structural reforms, that Berlusconi was never able to do, with determination and speed. Now.
The only place to go in order to do this is the parliament, not the "round tables". Mario, destroy the concertazione!

Freitag, 25. November 2011

Yesterday's summit in Strasbourg has proved, that the future architecture of European leadership will be different from the German-French "Directorate", that was in place since the Greek crises has begun. Under the highly respected Mario Monti Italy is returning on the stage. Both, German Chancellor Merkel as well as the French President Sarkozy have made that clear yesterday, with words but also with gestures. The dark days of Italy's international isolation caused by Berlusconi are definitively over. But what will Monti do with the renewed influence?

Be sure, that he has apart from his domestic an articulated European agenda. The Professor spent during his two mandates as EU-Commissioner so much time on Brussels that he is a truly European and remains an indiscussed expert on all communitarian matters.
During the trilateral meeting yesterday the leaders have talked also about the two hottest topics at the moment: Eurobonds and a changed role of the ECB as lender of last resort. Listening to them afterwards it became clear that the first topic remains unpalatable to Germany. The fact, that Sarkozy as a strong advocate for Eurobonds showed a super-cautious attitude during the press conference is a signal, that not only Merkel but also Monti has influenced him, to be more realistic.

Even more interesting than that is, what the three said and what they didn't say about the ECB: they underscore the total independence of the Central Bank from politics. After the criticsm, that Merkel didn't even try to hide in the last months, this is a new tonality. Also here: hard to believe that Monti has been ininfluential to this. Nobody talked about about a possible new role of the ECB, which in combination with the highlightig of the independence makes a lot of sense. Why? Because it means that the institution led by Mario Draghi could have in the future more options to interpret it's role with more freedom and without the current risk, that the governments, overall the German, interfere too heavily. I can imagine that Bundesbank Governor Jens Weidmann, a former Merkel advisor, who is categorically against any enlargement of the role of the ECB, was not amused yesterday. Without the political rear cover he will feel on the future more and more alone in his fight, because most members of the governing council, including President Draghi, are more open to discuss about a new interpretation of the role for the ECB. By the way: it would be strange if Monti and Draghi, who know each other very well, have not talked recently exactly about that.

So I proved right yesterday in saying that Italy under Monti will start to influence in a critical manner the current discussions, but I proved wrong in saying, that this would be bad news for Angela Merkel. On the contrary, my impression is now, that she will one day use the new set-up of the European leadership to explain at home, because Germany has to accept, that the ECB becomes more Fed-like as lender of last resort. She knows perfectly that it's always better to digest controversial decisons with a convincing narrative.

Donnerstag, 24. November 2011

When the German Chancellor Angela Merkel and the French President Nicolas Sarkozy meet today Mario Monti, the recently appointed Italian Prime Minister, the Frenchman will be more pleased than his German counterpart. The reason is obvious: the EU Co-founder Italy is returning after Berlusconi dynamically on the international stage and will under the former EU-competition Commissioner with his no-joke style play a much heavier role than it used to play under his completely discredited predeccesor.
While Sarkozy and Merkel formed a kind of European directorate since the Greek crises broke out, France could have in the future more options. With a more influential Italy, Sarkozy will have a potential ally that up to now was not at his disposal. Don't forget: France and Italy are after Germany by far the biggest countries of the Eurozone. If they would pool their interestests, Germany would inevitabily drive in a weaker position than before.
Because one thing has to be clear: Germany with it's unreasonable only-austerity-ideology today is isolated in Europe. Maybe the Finns have similar ideas, but not even the stability oriented Dutch agree on the orthodox attitude of the German government and - worse - the Bundesbank.
So new scenarios emerge if France opens up to Italy and stops treating exclusively with Germany about solutions for the crises and the future governance of the Eurozone. That could mean a new push for a changed role of the ECB as lender of last resort or in the mid term the creation of Eurobonds.

Montag, 21. November 2011

The political life in Italy used with few exeptions always to be a "teatrino", a little theater. Showbiz. Entertainment, not too serious. Sure, the differences are huge between say a Giulio Andreotti and a Silvio Berlusconi, but there are not so many western democracies, where even porno stars have been elected as member of the Parliament.

Having said so, it is noteworthy, that in the long Berlusconi-years this already low level of political culture has even deteriorated. The "Cavaliere" has impressingly shown during the 17 years, that he spent in the political arena a scarce sense for the the democratic institutions and the rule of law. Avoiding taxes? An acceptable piccadillo, he once said. And his advice to the workers of Fiat in a sicilian plant, that risked the closure, he adviced: "Look for some clandestine work and than you can make it!" If a prime minister, who acts by definition as a role model for a country and it's people spreads such messages, no wonder that not only the polotical but also the civilian culture suffers.

When I saw last week the new government sitting in the aula of the Senate I thought spontaneously: Wow, what a difference! A totally new style....here are sitting serious people, interested only in the tasks and the challenges that they have to tackle. Mario Monti, the new PM, stayed seated for the whole long session. With diligence he took notes of the questions of the Senators and responded one on one precisely and without any trace of arrogance. It was a demonstration of his seriousness and his respect for the parliament

Differently Berlusconi never stayed seated for more than half an hour. And even then he didn't listen to the speeches, but usually chatted with some of his ministers. He hardly could hide his disinterest in the debates. He never responded questions diligently. He was always full of arrogance in order to show that he is the boss of the government and the parliamentarians are nothing else than Yes-men servicing the executive power.

Also visually the differences between the last cabinet of Berlusconi and the one of Monti, that was sworn in Wednesday could not be bigger: from al 24 ministers of the last administration maybe five or six were really ministrable, Finance Minister Tremonti for example. The rest: unacceptable for an important country. Take Umberto Bossi, the Lega Nord leader and last Minister for Reforms, admittedly a ill man after a stroke three hears ago. He fell during the sessions regularly to sleep, wor dirty shirts and had not an appropriate level of personal hygiene. Too many, too nice, too model-like were the female ministers. And effectively, when you didn't look only at them but you listened to them, you uderstood suddenly that they were not chosen for their competencies but for different reasons by the Cavaliere.

The new cabinet under the PM Mario Monti may be is a little bit grey on it's public perception. All these professors, civil servants and people from the institutions are used to be very careful in their expressions. But this new, this sober style will help not only the government, but Italy, to regain the seriousness on front of the Italians as well as internationally, it has lost under the show-regime of the TV-entrepreneur Silvio Berlusconi.

Montag, 14. November 2011

Every start is difficult. Also "Super-Mario" had today to make this experience. It was quite clear, that after the euphoria in the last days more sober moments would come.
Today the incoming Prime Minister held talks with different political forces in order to assure the broadest possible majority in the two Houses of the Italian Parliament. And it emerged chrystal clear, that the formation of the new government will not be a pick nick. The political parties are reluctant to provide Monti "carte blanche". And Berlusconi has already started to threaten, that he could in any moment put an end to the new government. Unfortunately this is in theory possible, because the center-right coalition has in one of the two Houses, the Senate, still a very robust majority. Add a more cautious feeling in the markets, where the spreads between Italian T-bills and German Bunds today returned to 500 basispoints and ready is a soup, that tastes not so good than the one of the last days.
Monti has in the next couple of days to solve overall one key question: will the cabinet be a purely "technical" staffed with ministers without any political link or will the government include also some politicians from the parties, which promised to support Monti? That latter solition would create more stability. But Berlusconi as well as the leader of the major opposition party PD, Pierluigi Bersani don't like that. They prefer to have nobody of "their" people in the government to maintain more freedom on their decisions.
Monti should press them hard, because of the superiority of the solution. On the other hand he has to be flexible enough to understand realistically, what in this Italian circus is feasable and what is not feasable. He cannot lose much time. The new governement has absolutely to be formed in two, maximum three days. It would send a desastrous signal to the European partners as well as the markets if it would take longer.

Sonntag, 13. November 2011

A long and ardous day is waiting for Italy's President, Giorgio Napolitano: he will meet with all political forces, which are represented in the parliament - from the Südtiroler Volkspartei to Berlusconi's People of Freedom party. The objective is clear: the President has to organize a broad majority for the new government and strap commitments from the political parties. No doubt, that he will succeed. At the end Monti will have the broadest majority, that in the Italian history any government has had. Certainly this refers only to this crucial moment of deep national crises. The picture could and will will change in the future. Personally I do expect that latest in te next Spring, that the support will diminish notably. So speed matters now.
How will the new government look like? It seems - from the perspective of this morning- that it will be a purely "technical" cabinet with highly qualified ministers, who are not linked to any political force. Even if I don't like this idea hundred percent, it can have an important advantage: independence and dynamism. Monti has to get things done. Fast. With such a cabinet the efficiency would be higher than in the case of a mixed technical-political government. But wait and see, the decisions in these regards are not yet taken.
On thing however is sure: The cabinet will be lean and mean. Monti plans only with 12 ministers or so, no deputies, no secretaries of state. What a difference to the government Berlusconi, where some 40 or 50 people had a function (and often nothing to do).
Expect from Monti a highly efficient management style. Good for Italy, good for Europe.

Samstag, 12. November 2011

My, and not only my fears yesterday evening luckily proved exagerated. Silvio Berlusconi has behaved as promised. No poker game. Simply resignation. Halleluja!
A new spin has emerged however today: many politicians are talking now about a "technical government", which would mean a cabinet without the presence of leading political figures from the Parties.
This would clearly weaken the position of Mario Monti, the incoming Prime Minister. It would be much easier for the political forces in the parliament to act swiftly in a destructive way, don't running the risk to damage their rappresentatives in the Monti-team. I really hope that this will not happen. Because a governement full of experts and professors has for sure a high intellectual level, but it wants a bit more than smartness to govern really this huge and complex country. Attenzione Mario: the first traps will emerge from tomorrow on. This is Rome, not Brussels. Take care!

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Über mich

Communications Professional. Served from 2007-2011 as Head of Media Relations and Executive Communications at the European banking Group UniCredit. Worked as The Business Editor and as Correspondent for Italy at German daily Handelsblatt. Collaborated with Neue Zürcher Zeitung. Held from 1995-2000 different journalistic positions at German public broadcaster Bayerischer Rundfunk. Board member at European Association of Communications Directors.